Hmrc disguised remuneration loans information required!

[taxed]

Hi all I'm in a state of complete meltdown and have ended up on this forum. I'll try and be as brief as I can. I received a letter from hmrc, stating that they're checking my tax position for the year ending April 2020 because they think the amount of tax I paid for that period is too low. The letter goes on to say they are aware I was employed by an umbrella and they believe that this employer used tax avoidance schemes called "disguised remuneration". Hmrc have given me a couple of weeks to send them information which includes bank statements, payslips etc, so they can complete the checks and decide whether or not there is more tax to pay and how much.

Now the issue I have is that yes I did work for this umbrella company and they would always advise me that all they were doing was legal and above board, even though they would pay me 2 separate wages in my account ; a small amount and a larger amount which I now understand was a loan scheme. Having spent the last 2 days reading more about the loan scheme and how it works, it's becoming clear to me that I'm on the wrong side of hmrc and they are right that I used this scheme. Have thought of contacting the umbrella but realise that I'm on my own on this one.

I have been using them since 2018 and only stopped using them mid last year when I decided to get a permanent and more stable job. Looking at a tax calculator online, it appears I obtained at least 18k a year more than I should have using these schemes for the 3 years, so I suspect I owe hmrc about 54k!.

My questions and again sorry if the post ended up long.
1. Hmrc are only asking me for information for year ending 2020 and yet I used the scheme from 2018 till mid 2021. Should I be open and honest and let them know the correct period I used the scheme?.
2. Considering how much I owe at least 54k, if I was to be open and honest with hmrc, how long would they give me to pay this back please?.
Looking forward to your advise...

[DealorNoDeal]

My questions and again sorry if the post ended up long.
1. Hmrc are only asking me for information for year ending 2020 and yet I used the scheme from 2018 till mid 2021. Should I be open and honest and let them know the correct period I used the scheme?.
2. Considering how much I owe at least 54k, if I was to be open and honest with hmrc, how long would they give me to pay this back please?.
Looking forward to your advise...

1. That's up to you. However, even if you only provide what they've asked for (2019/20), it's almost certain they'll come after the other years eventually.
2. You don't say whether the 54k is just tax but there may be nics as well. And there will be some late payment interest on top of this. You should be able to get a payment plan (time to pay) to pay it back over several years.

[taxed]

1. That's up to you. However, even if you only provide what they've asked for (2019/20), it's almost certain they'll come after the other years eventually.
2. You don't say whether the 54k is just tax but there may be nics as well. And there will be some late payment interest on top of this. You should be able to get a payment plan (time to pay) to pay it back over several years.

Hi thanks very much for your reply. I am aware that every situation is different but have read other posts on the net that say hmrc often demand the money for schemes like this within a year so have they now changed their to give offenders some time to pay?

[eek]

Hi thanks very much for your reply. I am aware that every situation is different but have read other posts on the net that say hmrc often demand the money for schemes like this within a year so have they now changed their to give offenders some time to pay?

They know they can't ask for the impossible and it's not in HMRC's interest for you to go bankrupt except in some rather unique circumstances. Hence they will initially demand things up front and then get more reasonable when they can see how much you can actually afford to pay.

And if HMRC are asking for the impossible you may find they change their tune when you ask your MP to deal with an impossible demand.

[cojak]

Hi all I'm in a state of complete meltdown and have ended up on this forum. I'll try and be as brief as I can. I received a letter from hmrc, stating that they're checking my tax position for the year ending April 2020 because they think the amount of tax I paid for that period is too low. The letter goes on to say they are aware I was employed by an umbrella and they believe that this employer used tax avoidance schemes called "disguised remuneration". Hmrc have given me a couple of weeks to send them information which includes bank statements, payslips etc, so they can complete the checks and decide whether or not there is more tax to pay and how much.

Now the issue I have is that yes I did work for this umbrella company and they would always advise me that all they were doing was legal and above board, even though they would pay me 2 separate wages in my account ; a small amount and a larger amount which I now understand was a loan scheme. Having spent the last 2 days reading more about the loan scheme and how it works, it's becoming clear to me that I'm on the wrong side of hmrc and they are right that I used this scheme. Have thought of contacting the umbrella but realise that I'm on my own on this one.

I have been using them since 2018 and only stopped using them mid last year when I decided to get a permanent and more stable job. Looking at a tax calculator online, it appears I obtained at least 18k a year more than I should have using these schemes for the 3 years, so I suspect I owe hmrc about 54k!.

My questions and again sorry if the post ended up long.
1. Hmrc are only asking me for information for year ending 2020 and yet I used the scheme from 2018 till mid 2021. Should I be open and honest and let them know the correct period I used the scheme?.
2. Considering how much I owe at least 54k, if I was to be open and honest with hmrc, how long would they give me to pay this back please?.
Looking forward to your advise...

And I’ll just put this here

DO NOT BELIEVE UMBRELLA SALESMEN WHO TELL YOU THAT THEIR OWN SCHEME IS LEGAL!

You research when you buy a car - do the same when you enter a contract of employment.

And as if by magic…

The top 10 umbrella company checklist for contractors

https://www.contractoruk.com/umbrell...ntractors.html

[taxed]

And I’ll just put this here

DO NOT BELIEVE UMBRELLA SALESMEN WHO TELL YOU THAT THEIR OWN SCHEME IS LEGAL!

You research when you buy a car - do the same when you enter a contract of employment.

And as if by magic…

The top 10 umbrella company checklist for contractors

https://www.contractoruk.com/umbrell...ntractors.html

I agree. It's a pity though that most of my work colleagues are still involved in this!

[GregRickshaw]

The most abhorrent thing about this is the fact these schemes are still being promoted!

I just can't believe this is still going on, seemingly unchecked as always.

Talk to HMRC, they are quite reasonable in their dealings, or have someone speak on your behalf (I did the latter). Get your MP involved, don't try to act as if you are not guilty or get angry with HMRC in these Tax Avoidance cases you've been stupid but there are reasonable ways out of this. Be honest and open about the years they have asked for only.

Negotiate a long TTP, ask if there is a possibility of reduced interest fees (a good advisor can get rid of these for you), be up front and honest with your proposed settlement amounts.

Stick to the years they have asked for. They may well come for the other years but for now answer what they have asked, there could be a hundred reasons why they haven't asked for the others yet, there is no need for you to tell them their job.

A lot of us on here were equally as stupid but there are ways out of it eventually.

Get pro-active and start negotiations asap.

You didn't mention the Umbrella was that deliberate? Be good to share and add to the list.

[Fred Bloggs]

I agree. It's a pity though that most of my work colleagues are still involved in this!

I hope you're sending a link to that post to your colleagues for them to read. The sooner they decide to untangle themselves from tax avoidance schemes, the better it is for them. The clock is ticking for them. At the very least, they should immediately quit from the tax avoidance scheme and go with a real paye umbrella company.

Good luck sorting out your business with HMRC.

[taxed]

I hope you're sending a link to that post to your colleagues for them to read. The sooner they decide to untangle themselves from tax avoidance schemes, the better it is for them. The clock is ticking for them. At the very least, they should immediately quit from the tax avoidance scheme and go with a real paye umbrella company.

Good luck sorting out your business with HMRC.

Yes I did. Out of the 18 professionals i work with, only 1 went with a differnt genuine schem and the other 17 including myself went this route. I then left as i wanted a more permanant job so 16 are still at it. I have shared the letter from hmrc with them and was shocked to learn that of all the 17 of us, I was the last to get this leter. They all got theirs from early 2021 till March this year. I suggested we open a whatsapp group to discuss this and only 2 agreed, the rest refused and they are adamant they are in the right!. The 2 who agreed with me, I feel for the lady as she is in complete melt down as well and I have had to drive to see her this morning as she only leaves a few miles from me. She couldnt even take her kids to school with the shock of this issue. I asked her what she did when she got the same letter last year and she said the umbrella also told her that all is good and they even emailed and reassured her so she ignored this. So if i only know 18 within my network, I hate to think how many are involved elsewhre in other areas. Its a time bomb waiting to happen and I am glad i made it here. I sent this link to my collegeues and those watching as I know you are here right now, please leave these schemes, they will only lead to far much worse for us.

[Fred Bloggs]

Yes I did. Out of the 18 professionals i work with, only 1 went with a differnt genuine schem and the other 17 including myself went this route. I then left as i wanted a more permanant job so 16 are still at it. I have shared the letter from hmrc with them and was shocked to learn that of all the 17 of us, I was the last to get this leter. They all got theirs from early 2021 till March this year. I suggested we open a whatsapp group to discuss this and only 2 agreed, the rest refused and they are adamant they are in the right!. The 2 who agreed with me, I feel for the lady as she is in complete melt down as well and I have had to drive to see her this morning as she only leaves a few miles from me. She couldnt even take her kids to school with the shock of this issue. I asked her what she did when she got the same letter last year and she said the umbrella also told her that all is good and they even emailed and reassured her so she ignored this. So if i only know 18 within my network, I hate to think how many are involved elsewhre in other areas. Its a time bomb waiting to happen and I am glad i made it here. I sent this link to my collegeues and those watching as I know you are here right now, please leave these schemes, they will only lead to far much worse for us.

Well done on being proactive, you have come to the right place.